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Working paper
Is It Better To Elicit Quantile Or Probability Judgments to Estimate a Continuous Distribution? Elicit Both and Create an Inner Crowd
In: Kelley School of Business Research Paper No. 17-44
SSRN
Optimal Market-Integration Decisions by Policymakers: Modeling and Analysis of Agriculture Market Data
In: Operations Research, Volume 70, Issue 1, January-February 2022, Pages 352-362 https://doi.org/10.1287/opre.2021.2191
SSRN
Impact of Compound and Reduced Specification on Valuation of Projects with Multiple Risks
In: Decision analysis: a journal of the Institute for Operations Research and the Management Sciences, INFORMS, Band 15, Heft 1, S. 27-46
ISSN: 1545-8504
Several firms make business decisions based on risk specifications or estimates provided by domain experts. But research on whether the format of risk specifications systematically affects decision making in multidimensional environments is scarce. Using laboratory experiments, we show that subjective valuations of projects with multiple risks are highly sensitive to the format of risk specification. In the experiments, participants considered a project that had two risks and would be considered a success when favorable outcomes occurred on both risks. Participants were provided with the probabilities of success for each risk in two different specifications. In the reduced specification, each probability was directly specified. In the compound specification, each probability was specified as a two-point distribution. The data showed that under the reduced specification, decision-makers' perceived value of the project was higher than its true value, because of conjunctive probability bias in which decision makers overestimated the conjunctive probabilities. Under compound specification, however, judgmental valuations were subject to two biases that acted in opposite directions and, as a net outcome, managerial valuations were closer to risk-neutral valuations.
Trust-and-Evaluate: A Dynamic Non-Monetary Mechanism for Internal Capital Allocation
In: To appear in Management Science
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